What is cryptocurrency?¶

Cryptocurrency is digitally recorded value that can be transferred through a blockchain or similar distributed-ledger system.

Avoid the dangerous assumption¶

The dangerous assumption is that cryptocurrency is either anonymous internet money or the same thing as funds held in an ordinary bank account.

Different cryptocurrencies operate under different technical and governance rules.

Some are designed as payment assets, while others support applications, tokens, smart contracts or access to services.

Ownership and transfer are usually controlled through cryptographic keys rather than a bank deciding whether a payment may occur.

A transaction can be recorded publicly on a blockchain even where the real-world identities behind the addresses are not visible.

This makes movement highly traceable in one sense and personally unattributed in another.

Cryptocurrency may be held through an exchange, hosted wallet, software wallet, hardware device or other custody arrangement.

The person using a wallet may be different from the person whose identity appears on an exchange account.

Preserve the asset name, network, wallet address, transaction hash, amount, timestamp, exchange or wallet provider and any related account identifiers.

Do not rely on the currency name alone.

Tokens with similar names can exist on different networks and may not be interchangeable.

Also distinguish the displayed market value from the amount of cryptocurrency transferred.

The value can change significantly over time.

When reporting, describe the asset, network and transaction evidence precisely and avoid claiming that a blockchain address identifies a person.

Operational takeaway¶

Treat cryptocurrency as network-recorded digital value and preserve the asset, network, address and transaction identifiers before attempting tracing or attribution.